Mobile phones, soap, cigarettes among products, services to get pricier

Prices of certain products and services are expected to increase in the 2025-26 fiscal year with the taxes and VAT on them increased in proposed national budget.

Finance Advisor Salehuddin Ahmed presented the Tk 7.9 trillion national budget for the 2025-26 fiscal year.

According to him, the budget is somewhat reform-oriented.

The proposed budget attempts to put in place a sustainable system that extends the benefits of development to everyone instead of limiting them to a select few.

MOBILE PHONES

The current VAT exemption on mobile phone manufacturing and assembly will be gradually reduced, though extended until 2027.

A 2.5 percent increase in VAT has been proposed for both production and assembly sectors.

CIGARETTES

Supplementary duty on imported cigarette paper is proposed to double from 150 percent to 300 percent.

In addition, a 25 percent duty is set to be imposed on imported tobacco seeds, which were previously exempt.

Profit margins on cigarettes will also attract a higher tax --up from 3 percent to 5 percent.

CHOCOLATE, BEAUTY PRODUCTS

• Minimum customs value has been raised across a variety of chocolate and beauty items:

• Cocoa-based chocolate goods: minimum value raised from $4 per kg to $10 per kg.

• Lipsticks: customs valuation raised from $20 per kg to $40 per kg. Lip liners, gels, glosses and similar products will now be valued at $20 per kg.

• Eye makeup (eye shadow, eyeliner, brow pencils, mascara): valuation raised from $7 per kg to $10 per kg.

• Manicure, pedicure and powder products: minimum value raised from $5 per kg to $10 per kg.

• Face and skin creams: valuation hiked from $8 per kg to $20 per kg. Moisturisers: from $8 per kg to $10 per kg.

• Makeup kits, foundations and similar items: valuation increased from $6 per kg to $12 per kg.

• Henna cones: $2 per kg minimum value introduced. Face wash: $10 per kg minimum set.

SOAP, SHAMPOO

For locally produced items, raw material VAT exemptions have been partially withdrawn, though the relief period has been extended to 2027.

Prices are expected to go up accordingly.

FRIDGE, AC

VAT exemptions at the local production stage have been removed for refrigerators, freezers, air conditioners and their compressors, as well as certain raw materials.

These changes are expected to lead to higher prices.

SET-TOP BOXES, PENS

VAT exemption has been lifted for set-top boxes, ballpoint pens and some surgical products at the import level.

LIFTS, ESCALATORS

Import duty on lifts, skip hoists and escalator parts has been raised from 1 percent to 15 percent.

LPG CYLINDERS

Partial withdrawal of VAT exemptions on locally produced LPG cylinders may lead to a slight price hike, though the relief window remains open until Jun 30, 2027.

WASHING MACHINES, OVENS

For locally made washing machines and microwave or electric ovens, VAT relief is being trimmed but extended until 2030.

Minimum valuation for ovens, cooking plates and boiling rings has been raised from $6 to $12 per unit.

BLENDERS, RICE COOKERS

A reduced VAT exemption has been proposed for locally made blenders, juicers, mixers, grinders, electric kettles, irons, rice cookers, multi-cookers and pressure cookers, though the exemption period will run through to 2030.

THREE-WHELEERS

For locally manufactured four-stroke three-wheelers, VAT exemption has been partially reduced but extended till 2030.

VEHICLE PARTS

Car parts will see higher tariffs:

• Front and rear glass (windscreens, windows): import duty raised from 10 percent to 25 percent.

• Brake linings, pads: duty up from 10 percent to 15 percent.

• Brakes, servo brakes and parts: raised from 10 percent to 25 percent.

• Gear boxes, differentials, axles (driving, non-driving), wheels and parts, shock absorbers and suspension systems, radiators, silencers, mufflers, exhaust parts, clutches, steering wheels, columns and boxes, airbags and related parts: duty increased from 10 percent to 25 percent.

• Minimum customs value on locks and padlocks: raised from $2.5 to $3 for general vehicle locks, and from $4 to $5 for door locks.

STEEL

Specific tax on light steel at production level has been proposed to increase by nearly 20 percent.

COTTON

Specific tax on carpas cotton at the production stage is set to rise from 3 percent to 5 percent.

YARN

Artificial and mixed fibre yarn will now attract a specific tax of 5 percent, up from the current 3 percent.

BLADES

VAT on blade production has been proposed at 7.5 percent, up from the existing 5 percent.

Shaving is likely to become costlier.

WIRES, FITTINGS

Production-stage VAT for wire cutters, top cutters, screws, connectors, nuts, bolts, electric line hardware and pole fittings will rise from 5 percent to 7.5 percent.

LED BULBS

Import duty on LED bulbs and modules will increase from 15 percent to 25 percent.

FURNITURE LOCKS

Minimum customs valuation for furniture locks is up from $3 to $3.5 per kg, and door locks from $4 to $5 per kg.

TOYS

Inflatable toys, balloons, laser light toys, marbles, puffers and masks will now carry a higher minimum customs value -- from $3.5 to $4 per kg.

MARBLE, GRANITE

Import duty on marble and granite has been sharply increased from 20 percent to 45 percent.

SERVICES

• Construction service VAT will go up from 7.5 percent to 10 percent.

• VAT on e-commerce commissions has been tripled from 5 percent to 15 percent.

• VAT on production of self-copy paper, duplex board and coated paper will rise from 7.5 percent to 15 percent.

• Household plastic items including tableware, kitchenware, hygiene and toilet goods will now attract a 15 percent VAT, up from 7.5 percent.

The proposed budget will be passed on Jun 30. The new fiscal year begins on Jul 1.